88E project update on the North Slope of Alaska

Published 19-AUG-2024 11:34 A.M.

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88 Energy (ASX: 88E) just put out an update on Project Phoenix, where the company drilled its latest well in the North Slope of Alaska.

In February 2023 88E drilled the Hickory-1 well at Project Phoenix and then earlier this year it completed a flow test on the well.

Off the back of that flow test 88E managed to flow oil to surface from two separate reservoirs (Upper SFS and SMD-B).

Flowing oil to surface from the well for us was a big de-risking moment for 88E - it showed:

That 88E’s project contained hydrocarbons AND
The hydrocarbons could be flowed to surface

From a technical perspective we think 88E managed to make a lot of progress, especially considering the flow test came from a vertical well. 88E could increase those flow rates by drilling a horizontal well in the future.

Now, 88E is working toward an independent contingent resource assessment for three of the reservoirs in the well (Upper SFS, Lower SFS, and SMD-B) is expects in Q4 of this year.

In the background 88E plans to start a formal farmout process to attract a strategic partner to fund future drilling and development of the project:

An update on 88E’s JV partner:

We also noticed in today’s announcement 88E put out an update on the funds due to 88E from its JV partner - Burgundy Xploration, LLC.

88E said that “Burgundy was due to pay its share of the AFE cost (approximately US$3 million) by no later than 15 August 2024, through either a public listing or a private capital raise. If the obligation remained unpaid, Burgundy was to transfer 50% of its working interest in the Toolik River Unit leases to 88E-Accumulate”.

88E also said that discussions with Burgundy were underway for the JV partner to provide a carry for 88E across 2025-2026 work program including “(but not be limited to) the drilling, completion and extended flow testing of a horizontal well on the Dalton Highway in return for additional working interest in the Project”.

Burgundy is planning a listing of its own to fund those costs so we will be watching out for an update on this from 88E.

What’s next for 88E?

In the short term we want to see 88E achieve two of the key objectives we set for the company as part of our 88E Investment Memo:

Objective #1 of our 88E IM: Contingent resource estimates at Project Phoenix, USA

Milestones
🔲 Contingent resource estimate #1 (SFS Reservoir)
🔲 Contingent resource estimate #2 (SMD Reservoir)

Objective #4: Firm up drill target at the Namibian asset

Milestones
✅ 2D seismic program starts
✅ 2D seismic program completed
🔄 2D seismic results & interpretation
🔲 Maiden prospective resource estimate
🔲 Primary drill target selected

Our 88E Investment Memo - why did we Invest?

You can read our Investment Memo in the link below. This memo provides a short, high-level summary of our reasons for Investing. We use this memo to track the progress of all our Investments over time.

Read our 88E Investment Memo here

In our 88E Investment Memo you can find: